Save the EU? The world is bigger than that
David Cameron wants to stay and fight, but wouldn’t our time be better spent concentrating on the global economy and not just the EU's?
So David Cameron wishes to save the EU. A referendum has been promised, provided he remains in power, but the Prime Minister has made his desire to 'stay and fight' clear. Yet for all the effort it would take to turn the bureaucratic behemoth into the “flexible” single market Cameron desires, wouldn’t our time be better spent concentrating on the global economy and not just the EU's?
I ask the question because the global economy is growing at over 3 percent a year while the EU's is in recession; the UK has a network of countries that have common ties through language, law and culture; and, as research produced by the think-tank Global Britain shows, the UK has had a £21 billion surplus with the rest of the world over the last six years while, in the same time, a deficit on trade with EU-26 of £190 billion.
Indeed, according to Global Britain, between 2008, when the recession took hold, and 2011, UK exports outside the EU grew by 4 percent while exports to EU-26 shrank by 10 percent. It has meant that the UK does 56 percent of its trade with the rest of the world and thus more than it does with the EU.
This is particularly relevant when considering countries like Australia. According to HM Treasury's Pink Book 2012 the UK appears not just to have a structural surplus on its trade with Australia, but has recorded a surplus with that country in each of the last eleven years.
By the same token, the UK has a trade surplus with the US of over £20 billion and a cumulated trade surplus over the six year period 2006-2011 of £114 billion. Again, this compares to our deficit with the EU-26 of £190 billion.
Nonetheless, it should be understood that the UK plays a key role in trade with Europe. As Bundesbank statistics show, it was Germany's biggest trading partner between January and September last year. Indeed, in 2011 the Eurozone's biggest trade surplus (Goods, Services, Income, Transfers) anywhere in the world was with the UK and we had a £46billion deficit with the EU in 2011.
It means that, as one of the largest consumers anywhere in the world, European economies need us more than we need them. This kicks Nick Clegg's claims that three million jobs would be put at risk if the UK left the EU right into the long-grass. Indeed, next month The Freedom Association is due to produce a publication by Tim Congdon CBE that should put this lie to bed once and for all.
The case for concentrating on the rest of the world is strengthened when we understand that the Commonwealth is now bigger in PPP GDP terms than the EU. Moreover, the Commonwealth is set to grow at 7.3 percent annually and in real terms. It compares well with a forecasted growth of 2.7 percent for the Eurozone which, given the current crisis, is already looking optimistic.
Indeed, it is to the Commonwealth Minister's credit that he realises that “the Commonwealth has never been stronger”. Nonetheless, the Government should take definite steps like those articulated in Tim Hewish and James Styles's book Common-trade, Common-wealth, Common-growth and not just address the opportunity of expanding the UK's economy with words.
As argued in an excellent article by Dan Hannan MEP, if Britain was not in the EU, we'd have signed a free trade agreement with countries in the rest of the world long ago. His article focuses on the US, however, as he notes, it would be the same for the Anglosphere and, for that matter, with large tracts of Asia, Africa and South America.
In my eyes this is because smaller countries are more agile and definitive when it comes to making trade deals. No amount of tinkering with the EU formula would allow the same flexibilty. We see Switzerland for example making deals with Japan and EFTA making deals with Canada, all before the EU even starts negotiations. We also see Switzerland in negotiations with China, India, and with the ability to replicate many of the EU's FTA deals clause by clause, if it is in its interests to do so.
It means that, as a small but independent nation, the Swiss aren't held back from making trade deals or increasing their competitiveness. Indeed, free from EU regulations Switzerland has been able to reform to become the World's Most Innovative Nation (according to The Global Innovation Index) and has been top of The World Economic Forum's Global Competitiveness Report for four years in a row. Furthermore, the two most competitive economies in the world according to the Index of Economic Freedom are Hong Kong and Singapore, showing that small can be competitive.
In being free, small and competitive the Swiss economy even attracted higher levels of FDI from the EU than the US in 2011. This puts back another myth that the UK would be severing economic ties with Europe should it leave the EU. In fact, outside the EU, the UK would be in an even stronger position than the Swiss with a larger economy and ties to the Commonwealth and Anglosphere.
It is time to realise that dream and refocus the UK's mindset beyond the EU. It is time the UK charts its own course and become competitive in the world again. It is time that we truly become great-globalists and leave the EU.
If Cameron is successful in his bid to remain in Number 10, we must make the right decision at the polls when it comes to a referendum. We'd be Better Off Out.
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